The 3 Ts of Energy Realism

I’m writing my next book about The Moment. I’m exploring the forces laying bare the challenges of the energy transition—as in last week’s post “The Grid Is in Trouble.” I’m looking at what The Moment means for you, the oil and gas leader. To seize this opportunity of a lifetime to lead in the energy future, we need to understand the stakes.

I imagine that The Moment’s rising complexities—such as a failing grid—could lead political and civic leaders to deeply pragmatic conversations about the energy future and just how hard that future will be to realize. I would like to imagine that as a society, we can set aside the oversimplified nonsense of a quick, easy, and costless transition. And I wish fervently that we instead will explore the Three Ts of Energy Realism—timeframe, trade-offs, and truth—that can make up an energy system evolution that’s responsible and pragmatic, as well as urgently pursued.

But we aren’t having these conversations yet. Why not?

Today, I look at what it would require for policymakers to (1) want to have those conversations and (2) want to have them with you—the oil and gas leader. Because that’s what at stake: not just a well-executed energy future, but one in which we are invited to participate as leaders.

The situation

The two reads. There are two ways that oil and gas leaders are reading The Moment—which are reflected in the ways readers reacted to “The Grid Is in Trouble.”

We can all agree: We need more energy for power—and the grid is straining to deliver it. It’s a perfect example of how the forces of The Moment lay bare the difficulty of implementing economy-wide decarbonization.

In my read, this means our industry has the opportunity—and the obligation—to step in and lead. The other read: The looming crisis is another reason for us to double down on status quo politics, fight for the place of traditional fuels in the power mix, and/or disparage intermittent renewable resources.

The problem-solvers. How we respond to the grid crisis—and engage with those who will have to solve it—reveals both how we will respond to The Moment and why that response will succeed or fail. Because, as I laid out for the looming grid crisis in “The Grid Is in Trouble,” nobody—and everybody—is charged with solving the problems posed by The Moment.

Whatever the energy challenge, it will be a loose and diffuse network of legislators, appointed policy officials, career regulators, and employees of regulated utilities who will determine whether and how that challenge gets addressed. That’s our audience during The Moment—and these problem solvers all answer to others who lack an understanding of the costs and consequences of climate-centric mandates. Among those “others,” we’re talking stakeholders: legislators, voters, and customers, all conveying these mandates up the policy food chain.

The problem-solvers’ dilemma. So myriad climate-centric stakeholders drive diffuse networks of decision-makers on energy challenges. If energy problems are to be solved, it will require a combination of brave leaders and a robust array of middle-tier policymakers and bureaucrats. Both must find a way to tell their bosses (voters, customers, legislators) the truth about the energy transition: It won’t be easy or simple. And they must do so while being responsive to the climate-centric mandates those bosses are imposing. Because if they don’t demonstrate responsiveness, they risk losing their role entirely. 

The Three Ts of Energy Realism: Timeframe, Trade-offs, and Truth

So how can these problem-solvers (our target audience) create solutions that (a) acknowledge the expectation of many stakeholders for easy energy transition answers, yet (b) also address the impending crises caused by an energy transition that will be more complicated than anything their bosses can imagine?

The big, important step: The problem-solvers must think and talk about the energy present and future using the Three Ts of Energy Realism:

Timeframe. Remaking the energy system while growing it will require decades, not years. Urgent action is not at odds with accepting this longer timeframe. In fact, better solutions require longer time horizons to ensure the necessary research and development as well as scalable implementation.

Trade-offs. There is no energy source free of trade-offs. Each energy source has a complicated set of variables that include land surface required, water use, emissions, effects on the neighboring community, efficiency, waste products, cost, supply chain, fuel needs, and weather flexibility. “Technology-neutral” is just another way of saying: Let’s stop anthropomorphizing our energy into “good” and “bad” choices and instead start valuing and weighing the myriad important trade-offs so we can make better decisions. Notably, urgent action is not at odds with accepting the reality of trade-offs.

Truth. Trusted leaders are going to have to start talking to their climate-centric bosses (again: voters, customers, legislators) about the realities of the energy transition. Even if we throw infinite money and mandates at it (e.g., California), we don’t have the technology and resources for a quick, effortless transition. The process is going to be expensive—and potentially disastrous—without some pragmatic decision-making. Notably, urgent action is not at odds with accepting the truth about the complexity of decarbonizing energy. Truth is central to our shared, long-term success.

The Mistake Not to Make—and What to Do Instead

Here’s the tough part about this for you, the oil and gas leader: Nobody wants to hear about the three Ts from you.  And if they do, they are already with you, so they aren’t your target audience.

To get into the conversation, you need to be much more strategic. The first step is understanding why we’re not already having the Three Ts conversation with the problem-solvers.

1. There is little precedent for such conversations. It’s going to be so hard, and there aren’t many brave, successful leaders to point to.
2. Problem-solvers don’t have alternative solutions to propose. The known playbook of solutions looks like defense of moving-slow, status-quo energy, or defense of the past. Things are so polarized that pragmatism can look a lot like playing for the other team—the status-quo team
3. There are few costs now to playing the easy-climate-transition game.

In short, they will get fired!

However: You will increasingly find that the problem-solvers will have quiet conversations with you in private. That’s one of the road signs indicating that The Moment is just around the bend. Your most urgent task: Foster the quiet conversations that allow the problem-solvers to develop courage and cover for the Three Ts. How do you do that? In these three ways:

1. You show up as their thought partner. You understand the pressures they are under from their climate-centric bosses and acknowledge what’s at stake for them in the Three Ts—both if they succeed and if they fail. You also need to share the climate-centric ambitions of their bosses and keep them front and center in all your conversations.
2. You bring real ideas to the table. With an understanding of the problem-solvers’ dilemma, you show up with concrete, climate-centric solutions. These can and will acknowledge the Three Ts, but your solutions also speak to the climate ambitions of their stakeholders (aka bosses!). In short, you bring the cavalry: more tools, more ideas, more experience, more resources.
3. You give them the credit. The problem-solvers will have to find each other and be the truth tellers. You can’t expect their climate-centric bosses to value your role, especially in the early days.

If energy policy conversations begin to incorporate the Three Ts, it won’t be because oil and gas leaders were front and center. And yet, absent our quiet support of and partnership with the problem-solvers, these conversations are far less likely to occur.

The Choice We All Face

Will we rally for the status quo? Or instead be relentlessly future-focused?

The Moment offers us an opportunity. To seize it, we must choose to be partners with the problem-solvers. Being relentlessly future-focused means offering solutions that are cleaner, more efficient, and more affordable. It means fostering energy policy conversations that help leaders and policymakers build solutions that embody all Three Ts.

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To more of the 3Ts,

Tisha